A Scary Statistic - Decreasing Number of Entrepreneurs

One scary statistic that appear in the WSJ today - the number of entrepreneurs has gone down. This is scary because small businesses are one of the engines of an economy recovery and of an employment recovery. Makes sense - small growing businesses need to add more employees proportionally than larger more established companies. This is a critical area of the economy and the government would be wise to ensure that entrepreneurs have the opportunity to succeed.

One thing that many entrepreneurs need is business financing. They need access to reasonably priced (risk adjusted - of course)  funding to enable them to succeed and grow. The current economy is not providing that. You can read my posts on small businesses lack sales and small business funding for more information on this..

As a factoring company owner - we see a large number of small businesses and entrepreneurs that need business financing. And one thing that we have noticed since the start of the credit crunch is that for the most part - prospect credit quality has increased. In principle one would think this is great (and up to a point it is!), but with this increase in prospect credit quality we have noticed that prospects that would have previously qualified for a business loan at a bank are unable to do so..... and using invoice factoring as their back up plan. In my view, some of these customers would be better served by cheaper bank financing.... if it was available. But it's not, and therein lies the problem.